HomeMy WebLinkAbout2013-08-26 PACKET 06.3.STAFF REPORT CASE: TA13 -016
ITEM: 6.3
PUBLIC MEETING DATE: 8126/13 TENTATIVE COUNCIL REVIEW DATE: 9/18/13
APPLICATION
APPLICANT: City of Cottage Grove
REQUEST: A zoning text amendment to the City's Subdivision Ordinance to allow
subdividers of property to construct the public improvements within their
projects either privately or publicly, with publicly designed plans and
specifications; and to change the amount of financial sureties that
developers submit to the City for public improvements, site grading,
erosion control, and landscaping to 125 percent of the construction cost.
SITE DATA
LOCATION:
N/A
ZONING:
N/A
CONTIGUOUS
LAND USE:
NORTH:
N/A
EAST:
N/A
SOUTH:
N/A
WEST:
N/A
SIZE:
N/A
DENSITY:
N/A
RECOMMENDATION
Approval.
COTTAGE GROVE PLANNING DIVISION
Planning Staff Contact: Jennifer Levitt, Community Development Director /City Engineer
651- 458 -2890 or jlevittRcottage- g rove. orq
GACITYFILES\13 CITYFILES\016TA Subd Ord Surety 2013 -06 -24 \Planning \TA13 -016 Subd Ord Surety SR cover 2013- 08- 26.docx
Planning Staff Report — Case TA13 -016
Subdivision Surety Ordinance Amendment
August 26, 2013
Proposal
The Planning Commission is requested to consider an amendment to the City's Subdivision Or-
dinance that allows subdividers of property the opportunity to construct the public improvements
within their project either privately or publicly, with publicly designed plans and specifications.
There are also proposed changes to the financial sureties that developers must submit to the City
for public improvements, site grading, erosion control, and landscaping. It is proposed for all public
improvements that the developer must submit a letter of credit or a third party agreement in the
value of 125 percent of the construction cost.
Background
Prior to June of 2010, the City's Subdivision Ordinance required subdividers to petition the City to
design and construct the public improvements. The City constructed the public improvements un-
der contracts let by the City. The total project costs were then assessed to the properties within
the project area. These projects all followed the rules of State Statute, Chapter 429.
The Planning Commission approved an ordinance change on June 28, 2010 to allow for subdi-
viders to either petition the City for the improvements or construct the improvements privately. As
part of that ordinance change, the subdivider was able to design a public project and the City
would comment and approve the plans and specifications. The City allowed private design and
private construction on Pinecliff 3rd, 4th, and 5th Additions. The City did not have a smooth or
successful experience with this methodology. In order for a project to be built to the City standard,
it is better if the City controls the design for the public improvements which ensures that the proper
specifications are provided and there is design consistency within the public infrastructure. The
goal is to make the project designed and constructed in the most cost - effective manner.
In review of the City ordinances regarding financial sureties that a developer must post with the
City, it was found that our current requirement of 150 percent of the construction cost was out of
line with the market and was making it challenging to develop in Cottage Grove. Staff has re-
viewed a number of other cities in regards to what financial securities are required of developers.
In order for the City to stay competitive in the residential housing market, it is important that our
fees and financial sureties be in -line with the market and economic conditions, yet at the same
time not putting the City at risk for needing to financially cover the cost of public improvements
proposed by new development. It is important to note that development pays for itself, and it is not
an additional burden to existing taxpayers for the new public infrastructure. This still holds true for
the proposed ordinance changes. The following is a list of what other communities are requiring:
• Centerville:
125%
• Rockford: 110%
• Farmington:
125%
• Carver: 125%
• Maple Plain:
125%
• Forest Lake:
125%
• Maple Lake:
125%
Planning Staff Report —Case No. TA13 -016
Subdivision Ordinance Amendment— Public Improvements
August 26, 2013
Page 2 of 2
• Dayton: 110% (125% after 1st reduction)
• Woodbury: 125%
• Sartell: 125%
• Stacy 125%
• Harris 125%
• Hinkley 125%
• St. Joseph 125%
The process for the development or subdivider's project stays the same. The City Engineer pre-
pares preliminary cost estimates for the public improvements, called a feasibility report. The report
outlines how the development will be served by sanitary sewer, water, storm water, roads, trails,
and parks. The feasibility report outlines all of the costs associated with the public infrastructure
within the development, along with all necessary work for grading, erosion control, and landscap-
ing. The report also outlines the costs associated with engineering, legal, fiscal, and administrative
related to the project. Based upon the feasibility report, a subdivision agreement (or developers
agreement) between the City and the subdivider is then prepared and signed by both parties.
Planning Considerations
The City has adopted the position that subdividers should be given the opportunity to construct the
public improvements either through the public process or privately with public design of the infra-
structure. A development agreement between the City and subdivider will still be agreed by both
parties and the construction of the improvements must comply with city plans and specifications. The
City will inspect the work during construction before the City accepts the improvements upon
completion.
To provide this option, it is suggested that the the current Subdivision Ordinance be amended to
allow a subdivider to request that they construct the public improvements either publically or pri-
vately. The proposed ordinance amendment also establishes a set of regulations that requires the
subdivider to provide certain financial sureties to the City. These sureties cover the total cost of the
public improvements, landscaping, lot grading, mailboxes, utility repair /adjustment, etc. An engi-
neering /administrative escrow must also be deposited with the City to cover city services and
expenses performed in the processing of the improvements. The ordinance still allows a subdivider
the option to petition the City for the construction of the public improvents and have the total con-
struction costs assessed to each benefited parcel. A copy of the proposed ordinance amendment is
attached.
Recommendation
That the Planning Commission recommends that the City Council approve the proposed ordin-
ance amendment.
Prepared by:
Jennifer Levitt, PE
Community Development Director /City Engineer
1 ORDINANCE NO. XXX
2 AN ORDINANCE FOR THE CITY OF COTTAGE GROVE, MINNESOTA AMENDING
3 TITLE 10, CHAPTER 3, SECTION 1, GENERAL OVERVIEW OF THE
4 SUBDIVISION ORDINANCE OF THE CITY CODE
5
6 The City Council of the City of Cottage Grove, Washington County, Minnesota, does
7 hereby ordain as follows:
8 SECTION 1. AMENDMENT Title 10, Chapter 3, Section 1; General Overview, of the
9 City's Subdivision Ordinance is amended and shall read as follows:
10 10 -3 -1: GENERAL OVERVIEW:
11 Minnesota statutes section 462.358, subdivision 2A, authorizes the city to condition
12 approval of the subdivision of property on the construction and installation of certain utilities. The
13 intent of this chapter is to specifically set out the required improvements which promote and
14 protect the public health, safety and general welfare. The city reserves the right to require
15 additional improvements if deemed necessary by circumstances and conditions unique to these
16 particular lands. No subdivision of land is allowed unless storm sewer, sanitary sewer, a
17 municipal water supply, streets and other public improvements are constructed to serve the area
18 being divided unless some other ordinance or statute specifically authorizes said division. (Ord.
19 880,7 -21 -2010)
20 SECTION 2. AMENDMENT Title 10, Chapter 3, Section 3; Subdivision Agreement, of
21 the City's Subdivision Ordinance is amended and shall read as follows
22 10 -3 -3: SUBDIVISION AGREEMENT:
23 A. Contents of Agreement: The city shall enter into a contract, known as a subdivision
24 agreement, with the subdivider /developer. The agreement shall provide for the completion of
25 the improvements required by this title. Prior to the subdivider or city initiating the
26 improvements, the final plat and resolution shall be recorded, the subdivision agreement and
27 petition under Minnesota statutes chapter 429 shall be signed, all cash deposits paid, the
28 financial guarantees shall be posted and approved by the city attorney, and land required to
29 be dedicated is conveyed to the city. Until completion of the foregoing, only rough grading or
30 other minor forms of construction can begin.
31 B. Public Improvements:
32 1. The agreement shall require the subdivider /developer to furnish and construct at the sole
33 expense of the subdivider and at no expense to the city all the public improvements in
34 accordance with the plans and specifications prepared reviewed and approved by the city
35 engineer or require the subdivider /developer to petition the city to furnish and construct
36 improvements in accordance with the plans and specifications prepared by the city
37 engineer. The city engineer shall prepare preliminary cost estimates for the public
38 improvements, together with the costs for engineering, legal, fiscal and administrative
424359vl S1S CT155 -46
Ordinance No. XXX
Page 2 of 7
39 costs related to the project, which shall be incorporated into the subdivision agreement.
40 (Ord. 880, 7 -21 -2010)
41 2. (Rep. by Ord. 880, 7 -21 -2010)
42 3. The completion date for the public improvements shall be reasonable, considering the
43 work to be done, the season of the year and proper correlation of the improvements with
44 construction activities in the subdivision and other projects which are included within the
45 city improvement contract(s).
46 4. No subdivider who has previously defaulted on work or commitments on the phases of
47 the original preliminary plat or other projects in the city less than five (5) years old shall
48 be permitted to start work on any other subdivision until the defaults are remedied.
49 5. The subdivision agreement shall contain provisions for park dedication as required in
50 section 10 -4 -3 of this title.
51 C. Boulevard And Yard Improvements:
52 1. The subdivider /developer shall be required to assure the performance and /or installation
53 of the following:
54 a. Rough grading of all public rights of way.
55 b. Grading and seeding of vacant lots.
56 c. Cutting of grass and weeds, in excess of eight inches (8 ") in height', on vacant lots.
57 d. Street sweeping and cleaning of storm sewers and holding ponds.
58 e. Installation and maintenance of erosion control devices.
59 f. Boulevard sod, boulevard trees, and yard sod.
60 g. Replacement of trees removed from the right of way.
61 h. Monument replacement.
62 i. Surveyor's certification of individual lot grading compliance.
63 j. Drainage and erosion control plan compliance.
64 k. Final grading of each lot in subdivisions in compliance with the approved plan.
65 I. Driveways compliant with section11 -3 -9, "Off Street Parking And Loading,"
66 requirements of this code.
67 2. The subdivider shall not transfer or assign its obligations to install and pay for boulevard
68 trees, sod and hard surface driveways to the home builder or purchaser of any lot.
424359v1 SJS Cr155 -46
Ordinance No. XXX
Page 3 of 7
69 D. P -hliie Private Utilities:
70 1. New Lines To Be Underground: All electrical distribution systems (excluding main line
71 feeders and high voltage distribution lines), telephone service lines, gas lines,
72 telecommunications lines, cable lines and services constructed within the confines of and
73 providing service to customers in a newly platted area, shall be buried underground;
74 unless the city council, by resolution, determines that:
75 a. Such requirement would result in unnecessary duplication of facilities where the
76 property to be served abuts an existing development already served by overhead
77 facilities; or
78 b. That based upon engineering considerations, underground installation of such facilities
79 is not feasible in a particular plat or portion thereof; or
80 c. That the size of the subdivision is too small to justify the underground installation of
81 such facilities. (Ord. 880, 7 -21 -2010)
82 10- 3 -4 -1: SUBDIVIDER PETITIONED PROJECTS:
83 A. Financial Guarantees Required Generally: The subdivider shall be required to post financial
84 guarantees to ensure completion of all improvements required by this title, the preliminary
85 and final plat resolutions, and the subdivision agreement. The financial guarantees shall be
86 in the form of cash deposit , egGFGW, er irrevocable letter of credit or other form of financial
87 security found to be acceptable by the city
88 B. Public Improvements: One hundred percent (100 %) of improvements including, but not
89 limited to, street lighting, p ub4is sanitary sewer, water, storm sewer, curb and gutter, street
90 grading and street bituminous surfacing, shall be assessed against properties in the
91 subdivision. The developer shall provide the city with a letter of credit in an amount of forty
92 percent (40 %) of the estimated cost of the improvements, which letter of credit shall
93 guarantee payment to the city of the assessments.
94 C. Boulevard And Yard Improvements:
95 1. The subdivider shall be required to post financial guarantees in the amount of one
96 hundred fifty percent (150 %) of the estimated costs to assure completion of the items
97 listed in subsection 10 -3 -3C1 of this chapter. The financial guarantees shall be subject to
98 approval by the city attorney before acceptance by the city. The subdivider shall deposit
99 with the city, from a bank or other reputable and financially sound institution subject to the
100 approval of the finance director, a letter of credit guaranteeing performance and
101 completion of improvements /work required by the subdivision agreement.
102 2. If there is noncompliance with the requirements of this title, at any time, the city
103 administrator can direct the performance of any work required of the subdivider.
104 Specifically, if on site improvements have not been installed or structures occupied for
105 forty five (45) days or longer, the city administrator shall direct an inventory for
106 noncompliance on June 15 and September 15 of each year and may direct the
107 performance of any work heretofore required of the subdivider. The cost of the city's
424359vt SJS C7155 -46
Ordinance No. XXX
Page 4 of 7
108 performance of any such work, including labor, equipment and material, shall be paid
109 from the posted financial guarantees. (Ord. 880, 7 -21 -2010)
110 10- 3 -4 -2: SUBDIVIDER FINANCED AND CONSTRUCTED PROJECTS:
111 A. � � Financial securities The development contract provided by section 10 -3 -3 of this
112 chapter must require the subdivider to provide sureties financial securities to the city by a
113 cash deposit, cert ^heGk ^" irrevocable letter of credit or other form of financial security
114 found to be acceptable to the city as follows:
115 1. Off site suret Public Improvement Financial Security
116
117
118
119
120
121
a. A surety financial security must be provided to the city in a sum equal to one hundred
fifty twenty five percent (4-590 125 % ) the total cost of the improvements as estimated
by the city engineer. Of the total amount, five twelve percent (" 12 % ) or two
thousand dollars ($2,000.00), whichever is the greater, must be posted as a non -
refundable cash deposit escrcW to be held in a no—ninterest bearing account an
(95% thetotal shall be as
irreVeGable lettero
122
of posted Gash oran
credit. This financial seGHF rRust be automatically -
renewed and shall not expire
123
released by the - G* . These guarant The financial security and the cash deposit
124
must be filed with the city prior to release of the final plat for recording. If the security
125
financial security is a letter of credit, the seGurity it must contain a provision that
126
prohibits the issuer or surety from terminating the se cUrty letter of credit without first
127
giving forty five (45) days written notice to the city of the proposed termination or
128
expiration of +� Garity Failure of the developer to post a substitute security within
129
five (5) days after notice by the city shall constitute a default that shall be grounds for
130
drawing on the letter of credit. The city council may grant a reduction in the financial
131
security upon written request by the developer based upon the value of the completed
132
work at the time of the requested reduction. The financial security may not be reduced
133
to less than twenty percent (20 %) of the original amount until all work required of the
134
developer by this agreement has been completed and accepted by the city. Upon
135
failure of the developer to perform, the city may declare the agreement to be in default
136
and the amount of the financial security shall be paid over to the city. From the
137
proceeds of the financial security, the city shall be reimbursed for any attorney fees,
138
engineering fees or other technical or professional assistance, including the work of
139
the city staff and employees, and the remainder thereof shall be used by the city to
140
complete the a nE work The developer shall be liable to the city to the extent
141
that the financial security is inadequate to reimburse the city its costs and pay for the
142
completion of the work.
143 b. Items covered by these guarantees must include, but not be limited to, water mains,
144 sanitary sewers, storm sewers, bituminous streets with concrete curb and gutter,
145 streetlights, and trails, sidewalks and park features These financial guarantees are
146 for all of the improvements to be furnished and installed by the subdivider, pursuant to
147 the development contract, and which have not been completed prior to filing of the
148 final plat.
424359v1 SJS C'1'155 -46
Ordinance No. XXX
Page 5 of 7
151
152 the subdivider under the contract, the balaRGe Femaining of the Gash escrow M61
153 re' Tided to f"^ subdivide require reimbursement for additional expenses if the
154 engineering, inspection, testing, legal, or administration exceeds the 12 percent cash
155 deposit or require an additional cash deposit be made in order to cover these
156 expenses
157 2. On site surety Site Grading, Erosion Control. and Landscaping Financial Security
158 a. A suret y financial security must be provided by the subdivider to the city in
159 a sum equal to one hundred fifty percent (100% 150 % ) of the amounts established for
160 on -site improvements by the department of community development. Five perceR
161 (5%) of the total estimates must be p osted as a Gash ,,.,.,,... f to he held in a
162 and ninety five peFGeRt ° noninterest bearing
163 ash ^ cable letfar Of cred This financial security must be automatically
164 renewed and shall not expire until released by the city. This surety security must be
165 filed with the city prior to release of the final plat for recording.
166 b. Items covered by this surety security must include, but not be limited to, landscaping
167 as required by resolution, mailboxes, utility repair, adjustment site grading. erosion
168 control, boulevard trees, landscaping. irrigation and lot grading, as well as costs for
169 any entryway sign. These financial guarantees are for all of the improvements to be
170 furnished and installed by the subdivider, pursuant to the development contract, and
171 which have not been completed prior to filing of the final plat.
172 c. The city is entitled to reimburse itse out of the Gash escro ^ seek reimbursement from
173 the financial security for any cost and expense incurred by the city for completion of
174 the work in case of default by the subdivider. Upon completion of the work and
175 termination of any liabilities to the city by the subdivider under the contract, the
176 balance remaining of the Gash— eserovY financial security must be refunded to the
177 subdivider.
178 B. Engineering /Administrative l7scrow Cash Deposit
179 1. In addition to the above required financial securities Tthe developer must pest "a [ to the
180 city an engineering /administrative cash escrow to be held in n neninterest beari
181 account deposit in the amount of twelve percent (12%) of the one hundred twenty five
182 percent (125 %) construction cost for the public improvements.- Th eSGFG W ^ ° f h° ^
..... _
010 I WIN " M o ll
M-1
MWIN
1
191 2. The city may use the cash deposit to reimburse itself for Gcosts of city services,
192 expenses, and materials provided in reviewing and processing of the final plat including,
4243590 SJS Cr155 -46
Ordinance No. XXX
Page 6 of 7
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
but not limited to, staff time, legal expenses incurred in plat approval, office and field
checking, set ting grade and office and field grade verification erosion control inspection
establishing elevations and drainage requirements, general supervision, staking,
inspection, purchase and installation of street identification and traffic control signs,
drafting as built drawings, and all other city staff services performed in the processing of
the improvements and plats, and administrative and legal expenses in examining title to
the property being developed, must he r.haFged to the e r, r,
g , 1.,d + a t
account and must be nredited te the city of Cottage Grove.
2A a
r�szrns�rr�e r� grra�r.�r. - eRgineering/administrative 86GFGw aGGGunt is e - e - - e
213 p ( ) of the originally required Gash escrow ameuRt, the
215 the Gity administFater, SUff to cover all costs to 198 i RGUrred by the city in PFeGeG&iRa-
216 the f plat.
217 54. If all, or a part, of a development has been completed, inspected and accepted, al-I
218 - ca s h escrow monies securities for that portion accepted by the city, may be
219 reduced by the city council and full or partial payment be returned to the subdivider with
220 the exception of the nonrefundable public improvement cash deposit required by
221 paragraph A (1) (a) of this section) Any balance remaining in the account upon
222 completion of all platting conditions must be returned to the depositor by the finance
223 department after all claims and charges thereto have been paid and after approval by city
224 council with the exception of the nonrefundable public improvement cash deposit
225 required by paragraph A(1)(a) of this section) (Ord. 880, 7 -21 -2010)
226 SECTION 3. AMENDMENT Title 10, Chapter 3, Section 7; Subdivider Request for
227 Construction of Improvements is amended and shall read as follows:
228 10 -3 -7: CONSTRUCTION PLANS:
229 A. Construction plans and specifications for the required improvements conforming in all
230 respects to the standards of the city engineer and the ordinances of the city of Cottage
231 Grove must be prepared at the subdivider's expense by a pFefess engineer ,.,he i
232 regis On the s t a te o f n
233 engineer the city engineer
424359v1 SJS Cr155 -46
Ordinance No. XXX
Page 7 of 7
234 B. SUGh plans together with the quantity of GonstruGt;e„ :ems must be submitted + Got
235 eng for the city engineer's appreval and estimate of tetal GGSt of the required
236 "M" NN' " pm pr
pe
?nrev n approva the II beco U aFt of the develo #
� p Ft n �i�cc- mc -rri
237 required in section 10 3 3 of th G-hapter. Reproducible plans approved by the city enginee
238 plus twe (2) pr Must all he furmshed to the city to be filed by the city engineer as a renord
239 ;n the engineering department At the inspection, all required improvements on the site that
240 are to be installed under the provisions of this chapter must be inspected during the course
241 of construction by the city engineer at the subdivider's expense, and acceptance must be
242 subject to the city engineer's certificate of compliance with the contract. (Ord. 880, 7 -21-
243 2010)
244 Section 4. Effective Date. This ordinance shall be in full force and effect from and after
245 its adoption and publication according to law.
246 Passed this day of . 1 2013.
247
248
249 Attest:
250
251
252
253
254
255
256
257
Myron Bailey, Mayor
Caron M. Stransky, City Clerk
4243590 SJS 01'155 -46